Stance on 2024 annual Central Economic Work Conference Go back »

2024-12-20 | All chapters

Background

On 11^th and 12^th December 2024, China’s leadership outlined economic priorities for 2025 at the Central Economic Work Conference (CEWC). The meeting readout notes that the Chinese economy “posted generally stable performance” in 2024, while also acknowledging “the deepened adverse impact brought about by changes in the external environment and many difficulties and challenges still facing the domestic economic operation at present.” Notably, in the face of concerns that the stimulus/support packages announced so far have been insufficient to stem China’s economic slowdown, the readout calls for China to “adopt a more proactive fiscal policy and set a higher deficit-to-GDP ratio” and a “moderately loose monetary policy.” In addition, calls to “vigorously boost consumption” and “improve investment efficiency,” are both signs that leadership acknowledge the limitations of existing stimulus measures.

The readout does focus on foreign investment, however it is limited in terms of detail, with the readout calling for China to “expand its high-standard opening up and keep foreign trade and foreign investment stable.” By contrast, 2023’s CEWC readout specifically detailed the need to expand foreign trade, ease market access barriers and provide equal participation in public procurement. This suggests that a plan as to how foreign investment can be further encouraged/boosted is still a work in progress, and may well be attached to implementation of the 24 Measures, progress on which is ongoing.

Stance

The 2024 CEWC was characterised by somewhat mixed signals about the problems facing China’s economy. While calling for ambitious measures to address domestic challenges, in particular low consumer demand, the read-out did not provide much in terms of specific detail as to how demand will be boosted. It is positive that the need for more demand-side stimulus is clearly stated, but it will still take some time to clearly ascertain if existing and upcoming stimulus/support measures will have a tangible, positive impact on businesses’ bottom lines.

The Chamber suggests that focus also be placed on addressing business issues, such as long-standing market access and public procurement challenges. Given the uncertainty still surrounding China’s economy, it is important that meaningful improvements to the business environment are made in order to increase business confidence as we move into 2025.

For more information please contact